Euroz Hartleys executive chairman Andrew McKenzie with Ian Parker after last year’s merger between Euroz and Mr Parkers’ Hartleys. Credit: Ross Swanborough/The West Australian
Euroz Hartleys has launched Supreme Court action against four departing advisers, alleging they stole information about clients before and after quitting to join rival stockbroker Canaccord Genuity.
The ASX-listed firm filed proceedings in the court late on Tuesday, lobbing a writ and seeking injunctions against the advisers to prevent them from contacting any Euroz Hartleys clients until the allegations are heard.
The writ names the advisers as Lauren Walker, Brett Stapleton, Cameron Murray and Michael Bowden.
The quartet resigned from Euroz on November 2 but are on gardening leave and still employed by the firm. Another former back-office employee is also named.
It will be alleged the advisers downloaded 1400 documents about clients, including 630 on the day of their resignation, with the aim of using the information to further their starts at Canaccord.
It is understood it will be claimed that the documents included information on not just their clients, but those of other advisers at Euroz Hartleys.
The firm, which is being advised by MDC Legal and QC Grant Donaldson, alleges the four advisers copied the confidential client documents in breach of their employment contracts.
It also claims one or more of the advisers tried to entice other Euroz Hartleys staff to join them at Canaccord and attempted to persuade clients to change brokers.
Euroz Hartleys executive chairman Andrew McKenzie told staff of the court action on Wednesday morning, saying the firm had been forced to act to protect its business and its clients.
“Euroz Hartleys has brought proceedings in the Supreme Court involving five current and former employees who appear to have breached their legal obligations to us,” Mr McKenzie said in a staff email.
“They have potentially removed confidential information and contacted clients.
“We are disappointed we need to pursue this matter but the board is taking this action on legal advice to protect our adviser network and the relationships with our clients.
“We believe that if efforts are being undertaken to take clients from us by use of our confidential information and in breach of legitimate restraints protecting our interests, we must act.
“Our clients place their trust and confidence in us and our Industry has a responsibility to act ethically and responsibly towards our clients.”
Market sources said competition for experienced brokers and advisers is being fuelled by big sign-on bonuses of $600,000 to $1 million, subject to the recruits being performance targets.
Euroz last year merged with its major rival, the unlisted Hartleys, via a $30m scrip deal.
Shares in the merged group were 3¢ higher at $1.76, capitalising it at $340.8m.
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